Cornell Law Review Volume 104 Article 7 Issue 4 May 2019 Hertz So Good: Amazon, General Jurisdiction's Principal Place of Business, and Contacts Plus as the Future of the Exceptional Case D. (Douglas) E. Wagner Cornell Law School, J.D. 2019, [email protected] Follow this and additional works at: https://scholarship.law.cornell.edu/clr Part of the Commercial Law Commons, and the Jurisdiction Commons Recommended Citation D. (Douglas) E. Wagner, Hertz So Good: Amazon, General Jurisdiction's Principal Place of Business, and Contacts Plus as the Future of the Exceptional Case, 104 Cornell L. Rev. 1085 (2019) Available at: https://scholarship.law.cornell.edu/clr/vol104/iss4/7 This Note is brought to you for free and open access by the Journals at Scholarship@Cornell Law: A Digital Repository. It has been accepted for inclusion in Cornell Law Review by an authorized editor of Scholarship@Cornell Law: A Digital Repository. For more information, please contact [email protected]. NOTE HERTZ SO GOOD: AMAZON, GENERAL JURISDICTION'S PRINCIPAL PLACE OF BUSINESS, AND CONTACTS PLUS AS THE FUTURE OF THE EXCEPTIONAL CASE D.E. Wagnert INTRODUCTION ....................................... 1086 I. THE GENESIS OF GENERAL JURISDICTION ............ 1092 A. InternationalShoe Eventually Leads to General and Specific Jurisdiction .................... 1093 B. Doing Business: General Jurisdiction Before Goodyear and Daimler . ................... 1096 C. Goodyear and Daimler. Specific Jurisdiction Comes of Age and General Jurisdiction Limited to Two (or Three) Circumstances ............. 1098 D. Justices Ginsburg and Sotomayor Split Over General Jurisdiction . ..................... 1099 II. BRISTOL-MYERS SQuIBB's RESTRICTION OF SPECIFIC JURISDICTION CREATES NEW IMPORTANCE FOR GENERAL JURISDICTION ........................ 1104 III. GENERAL JURISDICTION AFTER DAIMLER: THE LOWER COURTS HAVE OFTEN APPLIED THE NERVE CENTER TEST AND HAVE LAID THE GROUNDWORK FOR THE CONTACTS PLUS TEST ....................................... 1106 A. The Nerve Center Test....................... 1106 B. The Contacts Plus Test ...................... 1113 IV. POLICY POINTS IN FAVOR OF DISTINCT TREATMENT OF PRINCIPAL PLACE OF BUSINESS INQUIRIES FOR SUBJECT- MATTER JURISDICTION AND GENERAL JURISDICTION, BUT THE CONTACTS PLUS TEST ALLAYS THE CONCERNS .... 1114 V. AMAZON's HQ2: A THIRD HOME? ........ 1118 VI. A POTENTIAL PATH FORWARD: THE EXCEPTIONAL CASE AS CONTACTS PLUS ............................... 1124 CONCLUSION ........................................... 1131 t B.A., McGill University, 2013; J.D., Cornell Law School, 2019; Publishing Editor, Cornell Law Review, Vol. 104. My thanks to Professor Zachary D. Clopton, for his unwavering guidance in aid of both this Note and my development as an attorney; to Leonardo Mangat, for listening to me ramble endlessly about personal jurisdiction; and to the entire staff of the Cornell Law Review for their tireless work. All errors are my own. 1085 1086 CORNELL LAW REVIEW [Vol. 104:1085 INTRODUCTION One of the best ways for a corporation to win litigation is to make sure the courthouse doors never open for the plaintiff in the first place. Consequently, corporations favor the argument that a court lacks personal jurisdiction; this argument has proven a useful tool in achieving victory.' An inquiry whether a corporation was subject to a court's personal jurisdiction, tra- ditionally, was complex and uncertain-great fodder for a law- school exam. 2 Luckily for corporations such as Amazon, Inc., the Supreme Court's recent decisions regarding personal juris- diction transformed what was often a nightmare for law stu- dents into a relatively simple matter. The Court simplified and restricted personal jurisdiction. First, the Court narrowed general jurisdiction.3 In 2014, with the Court's decision in Daimler AG v. Baumar,4 the Su- preme Court put an end to the "doing business" test by essen- tially holding that a corporation is only subject to general jurisdiction in the corporation's principal place of business or the corporation's state of incorporation.5 A fact-intensive in- 1 See, e.g., World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 295-96 (1980) (holding that Oklahoma state courts did not have personal jurisdiction over corporate defendants when plaintiffs were involved in an automobile accident in Oklahoma while using defendants' product). 2 Briefly, courts today treat personal jurisdiction as consisting of two catego- ries: general and specific jurisdiction. General jurisdiction applies when a lawsuit is unrelated to a defendant's contacts (activities) to the forum state. 4 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1067.5 (4th ed. 2008) ("When the cause of action sued on does not arise from or relate to the defendant's contacts with the forum state, an assertion of general jurisdiction must be predicated on contacts that are sufficiently continuous and systematic to justify haling the defendant into a court in that state."). General jurisdiction is synonymous with all-purpose jurisdiction. See Daimler AG v. Bauman, 571 U.S. 117, 121 (2014). On the other hand, specific jurisdiction is predicated on a lawsuit relating directly to a defendant's contacts with the forum state; the law- suit is specific to the relation between the defendant and the state. 4 WRIGHT & MILLER, supra note 2, § 1067.5. The Court hinted at this distinction in Interna- tional Shoe Co. v. Washington, 326 U.S. 310, 320 (1945), and Arthur T. von Mehren and Donald T. Trautman explicitly advocated for the distinction in Juris- diction to Adjudicate: A Suggested Analysis, 79 HARV. L. REv. 1121 (1966). In 1986, the Court discussed the two types of personal jurisdiction as a legal reality for the first time in Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 nn.8-9 (1984). 4 WRIGHT & MILLER, supra note 2, § 1067.5. 3 See Hinrichs v. Gen. Motors of Can., Ltd., 222 So. 3d 1114, 1124 (Ala. 2016) ("The United States Supreme Court subsequently amplified its restriction of the scope of general jurisdiction in DainlerAG v. Bauman, 571 U.S. [1171 ... cert. denied, 137 S. Ct. 2291 (2017). 4 571 U.S. 117 (2014). 5 See infra subpart I.B. 20191 HERTZ SO GOOD 1087 quiry with few Supreme Court cases, a recipe for litigation,6 became "dead letter."7 Second, the Court narrowed specific jurisdiction. In 2017, with the Court's decision in Bristol-Myers Squibb Co. v. Superior Court," the Court ended a brand of plain- tiff forum shopping that had been a thorn in corporations' sides.9 Corporations are less likely to be in court in 2018 than they were in 2010. There are, however, still battles to be fought. One of the next battlegrounds, on which the initial forays have already begun in the lower courts,1 0 returns to general jurisdiction. The foundation of the argument, however, begins with subject- matter jurisdiction. In 2010's Hertz Corp. v. Friend," the Su- preme Court held that a corporation's "principal place of busi- ness," in regard to 28 U.S.C. § 1332, means the corporation's "nerve center": "the place where a corporation's officers direct, control, and coordinate the corporation's activities."1 2 The 6 The few Supreme Court holdings on general jurisdiction left the subject open to interpretation. See infra subpart I.B. Daimler, however, very likely made formerly common arguments unviable. See Brown v. Lockheed Martin Corp., 814 F.3d 619, 629 (2d Cir. 2016) ("At that time, the Court's 2011 decision in Goodyear seemed to have left open the possibility that contacts of substance, deliberately undertaken and of some duration, could place a corporation 'at home' in many locations. But Daimler, decided in 2014, considerably altered the analytic land- scape for general jurisdiction and left little room for these arguments."). 7 Tanya J. Monestier, Where Is Home Depot "AtHome"?: Daimler v. Bauman and the End ofDoing Business Jurisdiction,66 HASTINGS L.J. 233, 265 (2014) ("The message in Daimlerhas come through loud and clear: doing business jurisdiction is a dead letter."). A "dead letter" is a "law or practice that, although not formally abolished, is no longer used, observed, or enforced." Dead Letter, BLACK'S LAW DICTIONARY (10th ed. 2014). 8 137 S. Ct. 1773 (2017). 9 As will be discussed below, the decision in Bristol-Myers Squibb dealt a blow to "litigation tourism." See Richard A. Dean & Katya S. Cronin, Bristol- Myers Squibb v. Superior Court: The Last Nail in the Coffin ofStream-of-Commerce Personal Jurisdiction, 60 DRI FOR DEF. 22, 25 (2018) ("In essence, [Bristol-Myers Squibb] deals a fatal blow to the refrain that the new economic realities of global- ization mean that a company with a national distribution network can be sued in any state of a plaintiffs choosing."). 1o Compare Nespresso USA, Inc. v. Ethical Coffee Co. SA, 263 F. Supp. 3d 498, 503 (D. Del. 2017) (applying the Hertz nerve center test), with Barnett v. Surefire Med., No. JFM-17-1332, 2017 WL 4279497, at *2 (D. Md. Sept. 25, 2017) (assessing general jurisdiction without reference to Hertz). It is important to note that there are procedural mechanisms that externally affect this jurisdictional battle. For example, multidistrict litigation, by which hundreds of thousands of federal cases have been consolidated (based only on a single common question of fact), is exempt from the requirements of personal jurisdiction; plaintiffs can use this mechanism to their advantage. See Zachary D. Clopton, MDL as Category, 105 CORNELL L. REV. (forthcoming July 2020) (manuscript